An economic expert has urged the Federal Government to invest profit declared by the Nigerian National Petroleum Company Limited’s (NNPC Ltd.) in critical sectors to boost the nation’s economy.
Dr Sand Mba-Kalu, the Executive Director, Africa International Trade and Commerce Research (AITCR) said this on Sunday in Abuja, in an interview with the News Agency of Nigeria (NAN).
NAN reports that the NNPC Ltd. had on Aug. 19, declared a net profit of N3.3 trillion at the close of the financial year which ended in December 2023.
This represents an increase of over N700 billion (28 per cent) when compared to the 2022 profit of N2.548 trillion.
The National Oil Company said this was the highest profit declared by the company since its inception 46 years ago.
Mba-Kalu said for Nigeria to fully experience the benefits of the declared profit, transparency in the allocation of funds was essential.
Mba-Kalu advised that the public must see that these funds were being directed towards critical areas of the economy that could directly benefit the population.
“For instance, addressing food inflation is a pressing issue that could be alleviated through strategic investments in agriculture and infrastructure,” he said.
He said that the profit could significantly boost investors’ confidence, as it reflected some level of effective management and suggested potentially stable returns within Nigeria’s oil and gas sector.
He said it offered an opportunity to enhance government revenue streams, which were crucial for funding critical infrastructure projects, social programmes and debt servicing, especially in a context where government finances were stretched.
“One particularly important area is the positive impact on foreign exchange reserves, which should strengthen the Naira.
“A stronger Naira could help stabilise the currency, reduce inflationary pressures, and improve the balance of payments position.
“Additionally, this stability will likely attract more Foreign Direct Investment (FDIs), particularly in the oil and gas sector, leading to technology transfer, job creation, and broader economic activity,” he said.
However, he said the key challenge lies in sustaining the declared profit.
According to him, sustainability is crucial, as these profit must not solely rely on favorable oil prices but should also stem from improved operational efficiency and cost management.
The expert said addressing the persistent issue of crude oil theft was also critical to maintaining and potentially increasing profitability.
Furthermore, he said the declared profit should lead to increased investments in social and economic development initiatives.
This, he said could create jobs and stimulate economic activities, particularly in regions heavily dependent on the oil and gas industry.
According to him by addressing critical infrastructure gaps, these investments can spur overall economic growth and significantly improve the quality of life for many Nigerians. (NAN)
